Stagwell Inc. · NASDAQ:STGW
Stagwell — MDC Partners — Q2 2020 Earnings Presentation
23 slides from Stagwell's earnings presentation, Aug 6, 2020
Slide 1: Management Presentation Second Quarter 2020 Results
Management Presentation Second Quarter 2020 Results August 6, 2020
Slide 2: Forward Looking Statements & Other Information
FORWARD LOOKING STATEMENTS & OTHER INFORMATION This presentation contains forward-looking statements. Statements in this presentation that are not historical facts, including without limitation the information under the heading "Financial Outlook" and statements about the Company’s beliefs and expec
Slide 3: Summary
SUMMARY • Organic Revenue decline of 26.4% in the second quarter and 12.9% YTD driven by lower spending by clients in connection with the COVID-19 pandemic • Adjusted EBITDA Margin for the second quarter of 2020 was 13.9% vs. 12.8% in prior year, an increase of 110 basis points • Adjusted EBITDA Mar
Slide 4: Second Quarter 2020 Financial Highlights
-----SECOND DRAFTQUARTER ----- 2020 FINANCIAL HIGHLIGHTS • Revenue of $259.7 million versus $362.1 million in the prior year period • Organic revenue decreased by 26.4% versus the prior year period. Organic revenue was unfavorably impacted by 457 basis point from billable pass through costs • Adjust
Slide 5: Six Months 2020 Financial Highlights
----- DRAFT ----- 2020 FINANCIAL HIGHLIGHTS SIX MONTHS • Revenue of $587.4 million versus $690.9 million in the prior year period • Organic revenue decreased by 12.9% versus the prior year period. Organic revenue was unfavorably impacted by 239 basis point from billable pass through costs • Adjusted
Slide 6: Consolidated Revenue and Earnings
CONSOLIDATED REVENUE AND EARNINGS (US$ in millions, except percentages) Three Months Ended June 30, Six Months Ended June 30, % % 2020 2019 Change 2020 2019 Change Revenue: $ 259.7 $ 362.1 (28.3) % $ 587.4 $ 690.9 (15.0) % Operating Expenses: Cost of services sold 165.6 240.7 (31.2) % 388.3 477.9 (1
Slide 7: Revenue Summary
REVENUE SUMMARY (US$ in millions, except percentages) Three Months Ended Six Months Ended Revenue $ % Change Revenue $ % Change June 30, 2019 $ 362.1 $ 690.9 Organic revenue (95.4) (26.4) % (89.0) (12.9) % Non-GAAP acquisitions (dispositions), net (4.1) (1.1) % (9.8) (1.4) % Foreign exchange impact
Slide 8: Revenue by Geography and Segment
REVENUE BY GEOGRAPHY AND SEGMENT (1) (US$ in millions, except percentages) 2019 2020 Q2 Q3 Q4 Q1 Q2 Organic Organic Organic Organic Organic Total Total Revenue Total Total Revenue Total Total Revenue Total Total Revenue Total Total Revenue Growth Growth Growth Growth Growth Revenue Growth (Decline)
Slide 9: Revenue by Geography and Segment (Six Months)
REVENUE BY GEOGRAPHY AND SEGMENT (1) (US$ in millions, except percentages) Six Months Ended June 30, 2019 2020 Organic Organic Total Total Revenue Total Total Revenue Growth Growth Revenue Growth (Decline) Revenue Growth (Decline) United States $ 547.7 (0.7 )% (2.8 )% $ 474.9 (13.3 )% (12.2 )% Canad
Slide 10: Revenue by Client Industry
REVENUE BY CLIENT INDUSTRY Q2 2020 Mix Year-over-Year Growth by Category Transportation and Q2 2020 QTD Q2 2020 YTD Automotive 5% Travel/Lodging 3% Other 10% 0% to 10% Automotive Technology 15% - Retail, Consumer Products, Food and Beverage, Retail, Food & Beverage Automotive, Technology, Technology
Slide 11: Adjusted EBITDA
ADJUSTED EBITDA (1) (US$ in millions, except percentages) % Change 2019 2020 Q2 2020 vs. Q2 2019 Q2 Q3 Q4 Q1 Q2 Integrated Networks - Group A 18.2 24.0 31.7 16.3 17.2 (5.5) % Integrated Networks - Group B 24.8 22.0 19.5 17.1 16.4 (33.9) % Media & Data Network 1.0 1.4 5.4 1.8 0.9 (10.0) % All Other 1
Slide 12: Adjusted EBITDA (Six Months)
ADJUSTED EBITDA (1) (US$ in millions, except percentages) Six Months Ended June 30, 2020 2019 % Change Integrated Networks - Group A $ 33.5 $ 19.2 74.9 % Integrated Networks - Group B 33.5 43.1 (22.3) % Media & Data Network 2.7 1.0 NM % All Other 16.8 17.7 (5.3) % Corporate (10.8) (13.1) (18.1) % Ad
Slide 13: Covenant EBITDA
COVENANT EBITDA Covenant EBITDA 2019 2020 (LTM) (1) Q1-2020- Q2-2020 - (US$ in millions) Q2 Q3 Q4 Q1 Q2 LTM LTM Net income (loss) attributable to MDC Partners Inc. common shareholders $ 0.8 $ (5.1) $ (10.5) $ (2.4) $ (4.1) $ (17.2) $ (22.1) Adjustments to reconcile to operating income: Accretion on
Slide 14: Summary of Cash Flow
SUMMARY OF CASH FLOW (US$ in millions) Six Months Ended June 30, 2020 2019 Net cash used in operating activities $ (33.7) $ (40.2) Net cash provided by investing activities 14.6 9.8 Net cash provided by (used in) financing activities (1.4) 25.7 Effect of exchange rate changes on cash, cash equivalen
Slide 15: 2020 Financial Outlook
2020 FINANCIAL OUTLOOK • Given the uncertainties in the global business environment arising from the COVID-19 pandemic, the Company is not providing a 2020 outlook for Revenue and Covenant EBITDA at this time. 15
Slide 16: Appendix
APPENDIX 16
Slide 17: Revenue Trending Schedule
REVENUE TRENDING SCHEDULE (US$ in thousands, except percentages) 2019 2020 Q1 Q2 Q3 Q4 YTD Q1 Q2 YTD Revenue United States $ 263,017 $ 284,659 $ 271,671 $ 296,698 $ 1,116,045 $ 264,561 $ 210,342 $ 474,903 Canada 22,378 24,564 25,895 32,230 105,067 18,256 16,609 34,865 North America 285,395 309,223 2
Slide 18: Adjusted EBITDA Trending Schedule
ADJUSTED EBITDA TRENDING SCHEDULE (US$ in thousands) 2019 2020 Q1 Q2 Q3 Q4 YTD Q1 Q2 YTD PARTNER FIRMS Revenue $ 328,791 $ 362,130 $ 342,907 $ 381,975 $ 1,415,803 $ 327,742 $ 259,678 $ 587,420 Operating income 20,504 40,073 38,532 26,899 126,008 37,667 11,921 49,588 Depreciation and amortization 8,6
Slide 19: Reconciliations
RECONCILIATIONS (US$ in thousands) 2019 2020 Q1 Q2 Q3 Q4 YTD Q1 Q2 YTD NON-GAAP ACQUISITIONS (DISPOSITIONS), NET GAAP revenue from current year acquisitions $ — $ 698 $ 1,347 $ 1,396 $ 3,441 $ — $ — $ — (1) GAAP revenue from prior year acquisitions 15,685 1,519 1,109 291 18,604 — — — Foreign exchang
Slide 20: Available Liquidity
AVAILABLE LIQUIDITY1 (US$ in millions) June 30, 2020 December 31, 2019 Commitment Under Facility $ 211.5 $ 250.0 Drawn 62.5 — Undrawn Letters of Credit 18.6 4.8 Undrawn Commitments Under Facility (1) $ 130.4 $ 245.2 Total Cash & Cash Equivalents 85.5 106.9 Liquidity $ 215.9 $ 352.1 1 Subject to avai
Slide 21: Current Credit Picture
CURRENT CREDIT PICTURE $211.5 million Credit Facility Covenants (1) Current Debt Maturity Profile (5) (US$ in millions) June 30, 2020 Covenants I. Total Senior Leverage 0.10 Ratio Maximum per covenant 2.00 II. Total Leverage Ratio 4.60 Maximum per covenant 6.25 III. Fixed Charges Ratio 2.94 Minimum
Slide 22: Definition of Non-GAAP Financial Measures
DEFINITION OF NON-GAAP FINANCIAL MEASURES In addition to its reported results, MDC Partners has included in its earnings release and supplemental management presentation certain financial results that the Securities and Exchange Commission defines as "non-GAAP financial measures." Management believe
Slide 23: MDC Partners Innovation Center
MDC Partners Innovation Center 330 Hudson St. 10th Floor New York, NY 10013 646-429-1800 www.mdc-partners.com